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Basel III and its impact on smaller regional banks, curious about real-world scenarios
Been diving into the specifics of Basel III implementation, particularly capital requirements for credit risk, and it seems like the capital conservation buffer and counter-cyclical buffer could really squeeze some of the smaller, regional banks that don't have the deep pockets of the G-SIBs. I'm trying to understand how this translates into their day-to-day operations and risk appetite. Are we seeing these smaller institutions pull back significantly from certain lending activities, or are there creative ways they're adjusting their risk frameworks to remain competitive while meeting the higher thresholds? Genuinely curious if anyone here has direct experience or insights into specific challenges or unexpected upsides for these banks.
1 comments · 1 points
That's a really interesting point. I wonder if it will push some of these smaller banks to specialize even more, or if we'll see more consolidation in that space as they try to meet the capital requirements.